LG Electronics is experiencing a decline of over 9% in early trading, despite optimistic expectations surrounding its collaboration with NVIDIA.
The visit of NVIDIA CEO Jensen Huang has heightened hopes for cooperation in physical artificial intelligence (AI) and robotics. However, profit-taking following a recent surge in stock prices, combined with a sharp drop in U.S. semiconductor stocks, has dampened investor sentiment.
As of 9:50 a.m. on June 8, LG Electronics shares were trading at 275,500 won, down 9.08% (28,000 won) from the previous trading day, according to the Korea Exchange. Other major affiliates of LG Group, including LG CNS (down 7.74%) and LG Innotek (down 6.72%), also saw declines.
Market analysts view Huang's discussions with LG Group Chairman Koo Kwang-mo regarding AI, semiconductors, and robotics as a positive development. However, they suggest that much of this optimism has already been factored into the stock prices.
This year, LG Electronics has seen a significant rise in stock prices driven by expectations for growth in AI, robotics, and automotive sectors. Nonetheless, the rapid increase has led to valuation concerns, prompting investors to seek profits.
Additionally, negative sentiment from the U.S. stock market has added to the pressure. On June 5, concerns arose that Broadcom's growth in the AI semiconductor sector fell short of market expectations, leading to a sell-off across semiconductor stocks. Consequently, the Philadelphia Semiconductor Index plummeted by 10.3%, marking its largest drop since March 2020.
Strong U.S. employment data has also revived fears of tightening by the Federal Reserve, further straining investor sentiment. Analysts predict that the combination of valuation pressures on AI-related stocks and a correction in global tech stocks may lead to increased volatility among domestic tech shares in the near future.
* This article has been translated by AI.
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